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DEPARTMENT OF SOCIOLOGY April 29, 2015 Does austerity harm health? Aaron

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Presentation on theme: "DEPARTMENT OF SOCIOLOGY April 29, 2015 Does austerity harm health? Aaron"— Presentation transcript:

1 DEPARTMENT OF SOCIOLOGY April 29, 2015 Does austerity harm health? Aaron

2 Thanks to... April 29, 2015 Does austerity harm health? Page 2 Martin McKee LSHTM Sanjay Basu Stanford David Stuckler Oxford

3 April 29, 2015 Austerity’s health effects Page 3

4 April 29, 2015 Does austerity harm health? Page 4

5 April 29, 2015 Does austerity harm health? Page 5

6 Three key questions 1. What changes have there been to health and social protection spending? 2. Has the economic crisis harmed health? 3. Drawing lessons from this recession on how to protect health systems and also people’s health April 29, 2015 Does austerity harm health? Page 6

7 PATTERNS OF AUSTERITY AND STIMULUS April 29, 2015 Does austerity harm health? Page 7

8 Patterns of austerity: (Red = reduced spending: Blue = increased spending) Units = per capita spending Count = No. of observations April 29, 2015 Does austerity harm health? Page 8 Reeves A, Basu S, McKee M, Marmot M, Stuckler D. Austere or not? UK coalition government budgets and health inequalities. Journal of the Royal Society of Medicine

9 HEALTHCARE AUSTERITY April 29, 2015 Does austerity harm health? Page 9

10 What about Greece?  ‘The savings will mainly come from: 1. Reduced public spending on drugs, 2. Decreases in workforce 3. Changes to purchasing of health services.’ (Karanikolos et al., Financial crisis, austerity, and health in Europe, The Lancet, 2013). April 29, 2015 Does austerity harm health? Page 10

11 Healthcare austerity: Greece April 29, 2015 Does austerity harm health? Page 11 Units = per capita spending

12 Healthcare austerity: Greece April 29, 2015 Does austerity harm health? Page 12 Kentikelenis et al., 2014, Greece’s health crisis: from austerity to denialism, Lancet.

13 Healthcare austerity: Unmet need April 29, 2015 Does austerity harm health? Page 13 50% All people 67% % Urban areas Kentikelenis et al., 2014, Greece’s health crisis: from austerity to denialism, Lancet.

14 Healthcare austerity: Why needs unmet? April 29, 2015 Does austerity harm health? Page 14 43% Could not afford 184% Too far to travel Kentikelenis et al., 2014, Greece’s health crisis: from austerity to denialism, Lancet.

15 SOCIAL PROTECTION AUSTERITY April 29, 2015 Does austerity harm health? Page 15

16 Social Protection austerity: (Red = reduced spending: Blue = increased spending) Units = per capita spending Count = No. of observations April 29, 2015 Does austerity harm health? Page 16 Reeves A, Basu S, McKee M, Marmot M, Stuckler D. Austere or not? UK coalition government budgets and health inequalities. Journal of the Royal Society of Medicine

17 Social protection austerity: (Red = reduced spending: Blue = increased spending) April 29, 2015 Does austerity harm health? Page 17 Reeves A, Basu S, McKee M, Marmot M, Stuckler D. Austere or not? UK coalition government budgets and health inequalities. Journal of the Royal Society of Medicine Units = per capita spending Count = No. of observations

18 UK: Rising severe material deprivation April 29, 2015 Does austerity harm health? Page 18 Severe material deprivation

19 UK: Inability to keep house warm April 29, 2015 Does austerity harm health? Page 19 Severe material deprivation Unable to keep house warm

20 UK: Cannot make ends meet April 29, 2015 Does austerity harm health? Page 20 Severe material deprivation Unable to keep house warm Unable to make ends meet

21 Social Protection Austerity: England April 29, 2015 Does austerity harm health? Page 21 Reeves A, Basu S, McKee M, Marmot M, Stuckler D. Austere or not? UK coalition government budgets and health inequalities. Journal of the Royal Society of Medicine Coalition government

22 HOW HAS THE RECESSION IMPACTED HEALTH? April 29, 2015 Does austerity harm health? Page 22

23 Economic crisis and alcohol April 29, 2015 Does austerity harm health? Page 23 Drinking behaviours in the USA, 2006–2010. Bor J, Basu S, Coutts A, McKee M, Stuckler D. Alcohol Use During the Great Recession of Alcohol Alcoholism. 2013; 48(3): Heavy drinking = >30 drinks per month (women); > 60 drinks per month (men).

24 Economic crisis and suicide: 24 EU countries Source: WHO Health for All European Mortality database 2013 edition; EuroStat 2013 edition. April 29, 2015 Does austerity harm health? Page 24

25 8,000 excess suicides April 29, 2015 Does austerity harm health? Page 25 Reeves et al., 2014, Economic Suicides in Europe and North America’s Great Recessions, Br J Psy

26 Economic crisis and suicide: Modifying effects April 29, 2015 Does austerity harm health? Page 26 Reeves Aaron, McKee M., Gunnell D., Chang S-S., Basu S., Barr B., Stuckler D., forthcoming, Economic shocks, resilience, and male suicides in the Great Recession: cross-national analysis of 20 EU countries. European Journal of Public Health.

27 Economic crisis and suicide: Modifying effects April 29, 2015 Does austerity harm health? Page 27 Reeves Aaron, McKee M., Gunnell D., Chang S-S., Basu S., Barr B., Stuckler D., forthcoming, Economic shocks, resilience, and male suicides in the Great Recession: cross-national analysis of 20 EU countries. European Journal of Public Health.

28 LESSONS FOR THE FUTURE April 29, 2015 Does austerity harm health? Page 28

29 WHY HAVE SOME COUNTRIES CUT THEIR HEALTH BUDGETS? April 29, 2015 Does austerity harm health? Page 29

30 Explaining healthcare austerity  Debt crisis:  “When public debt levels rise above 90% they tend to have a negative impact on economic dynamism.” (Ollie Rehn, 13 th Feb 2013)  Political ideology:  "I didn't come into politics to make cuts. We're tackling the deficit because we have to – not out of some ideological zeal. This is a government led by people with a practical desire to sort out this country's problems, not by ideology.“ (David Cameron) April 29, 2015 Does austerity harm health? Page 30

31 Explaining healthcare austerity  Depth of the recession:  ‘This time its different’ hypothesis  Visibility hypothesis:  “Governments generally found health care to be a cause of political headaches rather than a target for successful retrenchment.” (Paul Pierson)  International Financial Institutions:  IFIs have advocated for ‘structural adjustment programmes’, which include privatization, liberalization, and austerity policies, privileging conditions that facilitate private-sector investment. April 29, 2015 Does austerity harm health? Page 31

32 Is healthcare austerity a choice? Notes: Source: WHO Health expenditure database 2013 edition, EuroStat 2013 edition. Recessionary- and austerity-periods are defined in detail for each country. Recession is defined as declining GDP (adjusted for inflation and purchasing-power) in consecutive years. Austerity is defined as declining government expenditure (adjusted for inflation and purchasing-power) in consecutive years. Data on Malta, Luxembourg, and Cyprus excluded from the graphic. The US are included in this figure as a comparison but are not included in the other analyses April 29, 2015 Does austerity harm health? Page 32

33 What did not explain healthcare austerity? Change in GDP (Depth of recession) Public debt (Debt crisis hypothesis) Political ideology of governing parties (Ideology hypothesis) April 29, 2015 Does austerity harm health? Page 33

34 What does explain healthcare austerity? April 29, 2015 Does austerity harm health? Page 34 Reeves Aaron, Basu S., McKee M., Stuckler D., 2013, The political economy of austerity and healthcare, Health Policy

35 What does explain healthcare austerity? April 29, 2015 Does austerity harm health? Page 35 Reeves Aaron, Basu S., McKee M., Stuckler D., 2013, The political economy of austerity and healthcare, Health Policy

36 What does explain healthcare austerity? April 29, 2015 Does austerity harm health? Page 36 Reeves Aaron, Basu S., McKee M., Stuckler D., 2013, The political economy of austerity and healthcare, Health Policy

37 AUSTERITY, FISCAL MULTIPLIERS, AND ECONOMIC GROWTH April 29, 2015 Does austerity harm health? Page 37

38 Fiscal Multipliers: The effect of public spending on the economy April 29, 2015 Does austerity harm health? Page 38 Govt spending (+£1) Or Austerity (-£1) Fiscal Multiplier How that investment or reduction effects economy? >1 Increased Growth (GDP) <1 Reduced Growth (GDP)

39 IMF admits error “We underestimated the negative effect of austerity on employment and spending power” Fiscal multiplier assumed: 0.5 Actual multiplier: 1.7 April 29, 2015 Does austerity harm health? Page 39

40 Greater public spending, faster economic recovery April 29, 2015 Does austerity harm health? Page 40

41 Protect health, education, and social protection spending April 29, 2015 Does austerity harm health? Page 41 Reeves A, Basu S, McKee M, Meissner C, Stuckler D. Does investment in the health sector promote or inhibit economic growth? Globalization Health. 2013; 9(43).

42 Public support for austerity? April 29, 2015 Presentation title, edit in header and footer (view menu) Page 42

43 Public support for austerity? April 29, 2015 Presentation title, edit in header and footer (view menu) Page 43

44 Public support for austerity? April 29, 2015 Presentation title, edit in header and footer (view menu) Page 44

45 CONCLUSIONS April 29, 2015 Does austerity harm health? Page 45

46 HEALTH AND SOCIAL PROTECTION AUSTERITY HARM HEALTH April 29, 2015 Does austerity harm health? Page 46

47 AUSTERITY HURTS THE MOST VULNERABLE April 29, 2015 Does austerity harm health? Page 47

48 AUSTERITY IS A CHOICE AND… IT HAS HARMED THE RECOVERY April 29, 2015 Does austerity harm health? Page 48

49 April 29, 2015 Does austerity harm health? Page 49

50 DEPARTMENT OF SOCIOLOGY April 29, 2015 Does austerity harm health? Aaron

51 Healthcare austerity: Unmet need Unmet med need (yes=1), all persons Age <65Age 65+ High pop density Low pop density Crisis year (2011=1 vs 2007=0) 1.50 *** 1.42***1.67***1.91***1.20* [1.32,1.69][1.22,1.66][1.36,2.05][1.57,2.31][1.03,1.40] N April 29, 2015 Does austerity harm health? Page 51 * p < 0.05, ** p < 0.01, *** p < Controls: Age, Sex, Marital status, Degree of urbanization, and Education Alexander Kentikelenis, Marina Karanikolos, Aaron Reeves, Martin McKee, David Stuckler, 2014, Greece’s health crisis: from austerity to denialism, The Lancet.

52 Healthcare austerity: Why are these needs unmet need? Could not afford 1 Waiting list Could not take time 2 Too far to travel 3 Wanted to wait 4 Other 5 Crisis year (2011=1 vs 2007=0) 1.43 *** *** *** [1.23,1.66][0.83,1.85][0.58,1.37][1.68,4.81][0.87,2.18][1.57,3.48] N24177 April 29, 2015 Does austerity harm health? Page 52 * p < 0.05, ** p < 0.01, *** p < Controls: Age, Sex, Marital status, Degree of urbanization, and Education 1 Could not afford to (too expensive) 2 Could not take time because of work, care for children or for others 3 Too far to travel/no means of transportation 4 Wanted to wait and see if problem got better on its own 5 Other reason Alexander Kentikelenis, Marina Karanikolos, Aaron Reeves, Martin McKee, David Stuckler, 2014, Greece’s health crisis: from austerity to denialism, The Lancet.

53 Method: Data  National accounts data (Tax, Debt, GDP, Healthcare expenditure), EuroStat 2013 edition  Political ideology of governing party, World Bank Political Institutions database  IMF = Stand-By Arrangements (short-term allocations for balance of payments problems) or Extended Fund Facilities (medium-term allocations for balance of payments problems). April 29, 2015 Does austerity harm health? Page 53

54 Method: Model  Where:  Health = Change in Public health spending  GDP = Change in Gross Domestic Product per capita (PPP, Real)  Tax = Tax revenue per capita (PPP, Real)  Debt = Total government debt (% GDP) in previous year  Left / Right = Political ideology of governing party  Austerity = reduction in total government expenditure  IMF = Agreement in force  θ = random effect: pooled within- and between-country variation April 29, 2015 Does austerity harm health? Page 54

55 Results: Explaining healthcare austerity CovariatesAnnual change in health spending † $100 annual increase in tax revenue † $2.72 ** (0.82) Implemented austerity in current year IMF bailout active in current year Country-years339 Countries27 R2R April 29, 2015 Does austerity harm health? Page 55 Economic and political determinants of annual change in health spending among 27 EU countries, All non-reported controls are insignificant: Change in GDP, Public debt as percentage of GDP in the previous year, Left or Right governing party

56 Results: Explaining healthcare austerity CovariatesAnnual change in health spending † $100 annual increase in tax revenue † $2.72 ** (0.82) Implemented austerity in current year-$64.4 ** (13.3) IMF bailout active in current year Country-years339 Countries27 R2R April 29, 2015 Does austerity harm health? Page 56 Economic and political determinants of annual change in health spending among 27 EU countries, All non-reported controls are insignificant: Change in GDP, Public debt as percentage of GDP in the previous year, Left or Right governing party

57 Results: Explaining healthcare austerity CovariatesAnnual change in health spending † $100 annual increase in tax revenue † $2.72 ** (0.82) Implemented austerity in current year-$64.4 ** (13.3) IMF bailout active in current year-$44.8 * (18.7) Country-years339 Countries27 R2R April 29, 2015 Does austerity harm health? Page 57 Economic and political determinants of annual change in health spending among 27 EU countries, All non-reported controls are insignificant: Change in GDP, Public debt as percentage of GDP in the previous year, Left or Right governing party


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